You can’t put a price on satisfaction

Jo Causon, explores utility company performance on 28 measures of customer satisfaction and highlights polarisation between the sector's highest achievers and its laggards.

Few people would have been caught by surprise last month when Amber Rudd, the Energy Secretary, wrote to the big six energy firms demanding that they pass falling wholesale gas and electricity costs on to consumers.  It’s a debate that began some time before her pronouncement, back when Ed Miliband promised an 18-month freeze on prices, if he became Prime Minister.

Rudd said that her focus “is to get the best deal for consumers”.  You can understand why: the economy may be improving, but we are still living in difficult times and any move to ease the burden will be welcome.  In my view, however, the Energy Secretary’s announcement goes far beyond that of reducing prices.  Whilst price important – and our own research suggests this remains the case – getting the best deal for consumers is also about improving customer experience. 

“It is clear that organisations within the utilities sector vary widely when it comes to delivering customer satisfaction. There is a difference of 21 points between the highest scoring organisation, Ovo Energy, and the lowest.”  

The latest UK Customer Satisfaction Index (UKCSI) reveals that the Utilities sector scores lower than the UK average for each of the 28 measures of customer satisfaction that are explored. In an environment where gaining and maintaining trust is critical to building customer loyalty, it means the sector needs to pay greater attention to the way in which it delivers customer service. 

There is, unfortunately, no silver bullet that provides an easy answer. Improving customer service means everything from handling complaints quickly, efficiently and effectively to making it easy to do business.  Yet the fact is that while energy bills are also part of this equation, organisations must be careful not to sacrifice service in order to reduce prices.

Perhaps this is something that the sector is beginning to realise?  It is worth noting, after all, that the latest UKCSI highlights how its customer satisfaction scores are improving, even though overall customer satisfaction in the UK has flat-lined for the first time in two years.  The data shows, for example, that customer satisfaction in the utilities sector has increased by two points compared to July 2014.  The gap compared to the UKCSI average has also narrowed; a year ago it was 8.1 points; now it has narrowed to just 4.8.    

There is also a clear polarisation when it comes to performance.  Some organisations are succeeding through a sustained focus on service, whilst others are struggling to adapt and compete.  New entrants are also challenging the older, more established brands, and this clearly demonstrates that high levels of customer satisfaction can be achieved, are being achieved and should be sought within the sector.  You only have to look at the results to see how, as with a UKCSI score of 82.7, Ovo Energy is 7.2 points ahead of the next highest scoring organisation in the sector.

It is also clear that organisations within the utilities sector vary widely when it comes to delivering customer satisfaction. There is a difference of 21 points between the highest scoring organisation, Ovo Energy, and the lowest.  The biggest variations in the highest and lowest organisations’ performance relate to ease of getting through over the phone, staff competence and staff helpfulness, all with differences of at least three points. 

It is this level of competence that must be addressed if the sector is to climb from its current position of 13^th out of 13 sectors measured in the UKCSI.  Price is important, but it is a factor that needs to be considered as part of understanding the diversity of customer perspectives and attitudes.  Age, region and gender all play a part, too, meaning that utilities’ companies need to focus on improving customer satisfaction across all elements of the customer experience.

There are significant opportunities for utility companies to improve their business performance by focusing on customer service. Improving the speed and quality of complaint handling, for example, will enable organisations to improve their efficiency and bottom line performance.  The same can be said for improving customer interactions via web and phone based communications.

We are living in a relationship economy, where sustainable success for an organisation depends on the quality of its relationships with customers – across the value chain. 

Amber Rudd is right to highlight that a key aspect is price.  However, in an age where switching supplier is easy, it is just as critical to get the customer service right too.  Failure to do so can lead to dissatisfaction, with the end result being poor business performance at best and lost market share at worst.